What Russia's Election Means for Business

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That would reverse a recent trend for the state to increase its intervention in strategic sectors of the economy—with many of Putin's associates assuming top positions in major companies.

Tackling Pension Reform?

Medvedev also has hinted at breathing new life into key reforms that were attempted, but never fully implemented, under Putin. In remarkably frank comments to business leaders in February, he described Russia as a land of "legal nihilism," a reference to widespread corruption and the illegal methods often used to settle business disputes. Medvedev also pledged to make the judiciary independent from the executive and legislative branches, in effect acknowledging one of the biggest criticisms directed against Russia's current system of government.

Almost as crucial is pension reform, another neglected area Medvedev has promised to revisit. Since 2004, Russians have been able to pay part of their taxes into privately-managed pension funds, but in practice the idea has been so poorly promoted that few have bothered. As a result, Russia's stock market lacks long-term sources of capital and is highly volatile, while the state faces an ever-growing pension burden that represents a fiscal time bomb.

In foreign affairs, meanwhile, Medvedev has indicated a more conciliatory tone, pledging to cooperate with Western partners. That contrasts with the last few years of Putin's presidency, which have been dominated by disputes with the West, touching on everything from energy security to Kosovo policy to the deployment of the U.S. anti-missile defense system in Eastern Europe.

Changes in Style or Substance?

The new tone is certainly welcome to Western investors. "The change in style is itself quite important," says Roland Nash, research head at Moscow investment bank Renaissance Capital. "A large part of the reason why Russia is viewed as a difficult place to invest is the abrasive nature of policy coming out under Putin."

Only time will tell whether Medvedev's presidency will bring about real policy changes. Putin, too, has often struck a liberal tone, though his record has been decidedly more mixed. Although Putin introduced several key reforms during the early years of his presidency—including a market-friendly land code and simplified taxes—there has been far less progress in recent years, which have been more notable for increasing centralization of power and the expansion of state corporations. Corruption remains rampant, blossoming in tandem with Russia's economic growth.

Now may be an opportune time for a fresh bout of economic or political liberalization. In the years leading up to Russia's crucial 2008 election, Putin and his team were clearly extremely nervous about handling the transition of power, and prioritized political stability above all else. Once that tricky hurdle has been crossed, Russia's leadership will have more political leeway, providing greater opportunities for risky or difficult reforms. If he rises to the challenge, Medvedev's presidency could turn out to be a lot more eventful than his unsurprising election.

Bush is BusinessWeek's Moscow bureau chief .